IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 9, 2010
No. 09-31060
Summary Calendar Lyle W. Cayce
Clerk
STEPHEN J. HALMEKANGAS
Plaintiff
v.
STATE FARM FIRE AND CASUALTY COMPANY
Defendant
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STEPHEN J. HALMEKANGAS,
Plaintiff - Appellant
v.
ANPAC LOUISIANA INSURANCE COMPANY; STEPHEN MARSHALL
HARELSON; AMERICAN NATIONAL PROPERTY & CASUALTY COMPANY,
Defendants - Appellees
Appeal from the United States District Court
for the Eastern District of Louisiana
Before HIGGINBOTHAM, CLEMENT, and SOUTHWICK, Circuit Judges.
PATRICK E. HIGGINBOTHAM:
Stephen Halmekangas sued ANPAC Louisiana Insurance Company and
its agent Stephen Harelson in Louisiana state court. All parties were Louisiana
No. 09-31060
domiciliaries, and no federal question was presented. Facing the hurdle that the
district court would not have had original jurisdiction had the suit been first
filed there, defendants removed to federal court, asserting supplemental
jurisdiction under 28 U.S.C. § 1367(a) – on the idea that the state case related
to an action pending in federal court. The federal district court denied
Halmekangas’s efforts to remand and granted summary judgment to ANPAC
and Harelson. Halmekangas appealed. Because there was no authority to
remove the ANPAC action, we vacate the summary judgment and remand to the
district court with instructions to remand the ANPAC suit to the originating
Louisiana state court.
I.
Stephen Halmekangas lived in a three-story, 5,400-square-foot home in
New Orleans. Hurricane Katrina flooded his first floor; five days later, a fire
burned the house to the ground.
Seeking to recover from his homeowner’s policy – written by ANPAC –
Halmekangas learned he was underinsured. ANPAC’s agent, Stephen Harelson,
had covered the house as a two-floor, 3,400-square-foot dwelling. ANPAC paid
policy limits, $346,700 for the top two floors. Halmekangas sued ANPAC and
Harelson in Louisiana state court, urging two claims: (1) “Harelson and/or
ANPAC were negligent in not properly issuing the policy providing coverage for
the entire structure of 5,400 sq. ft.”; and (2) “Plaintiff relied to his detriment
upon the representations” of Harelson advising that he was fully covered. The
parties agree that there was no federal question or diversity jurisdiction.
A month after filing the state action, Halmekangas sued State Farm, his
flood insurer, in federal district court, asserting federal question jurisdiction
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No. 09-31060
under the National Flood Insurance Program.1 He claimed that State Farm had
arbitrarily and capriciously paid out only $83,399.57 for the flood in his 2,000-
square-foot ground floor, well under the coverage limit.
When ANPAC learned of the federal suit, it removed to federal court,
asserting jurisdiction supplemental to the State Farm case under 28 U.S.C. §
1367. Halmekangas protested, arguing in part that the state action against
ANPAC did not arise from the same nucleus of common fact as the State Farm
action. The federal district court disagreed, explaining: “the object of the
litigation in the two matters was the same: Plaintiff’s home.”2 The damages
alleged in the two suits comprised the common nucleus of operative fact. The
parties and the district court glided past the predicate question of
Congressionally conferred power to remove.
The cases progressed together in the Eastern District of Louisiana. The
court granted ANPAC’s summary judgment motion, Halmekangas and State
Farm settled out of court, and Halmekangas appealed the adverse summary
judgment. He now moves for dismissal – arguing that the district court never
had subject-matter jurisdiction to hear the ANPAC litigation. Indeed, it did not.
II.
“There should be little need for a reminder that federal courts are courts
1
See 42 U.S.C. § 4053 (granting “original exclusive jurisdiction” in National Flood
Insurance Program adjustment cases to the “United States district court for the district in
which the insured property . . . shall have been situated”); see also Borden v. Allstate Ins. Co.,
589 F.3d 168, 172 (5th Cir. 2009).
2
See Perret v. Am. Nat’l Prop. & Cas., Nos. 06-4618 and 06-6867, 2006 WL 3412267,
at *2, 2006 U.S. Dist. LEXIS 85760, at *6 (E.D. La. Nov. 27, 2006).
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No. 09-31060
of limited jurisdiction, having ‘only the authority endowed by the Constitution
and that conferred by Congress.’”3 In an effort to establish jurisdiction, ANPAC
points to two Congressional grants – 28 U.S.C. §§ 1367 & 1441.4
We begin by rehearsing how these two statutes work in isolation, then
describe how they can operate in tandem, and conclude by explaining why they
do not in this case confer subject-matter jurisdiction. Section 1367 allows federal
courts to hear state claims that travel with federal claims in the same lawsuit.
“It grants supplemental jurisdiction over [state] claims that do not
independently come within the jurisdiction of the district court but form part of
the same Article III ‘case or controversy.’”5 “The question under section 1367(a)
is whether the supplemental claims are so related to the original claims . . . that
3
Epps v. Bexar-Medina-Atascosa Counties Water Improvement Dist. No. 1, 665 F.2d 594,
595 (5th Cir. 1982) (quoting Save The Bay, Inc. v. United States Army, 639 F.2d 1100, 1102
(5th Cir. 1981)).
4
Section 1367(a) provides in relevant part:
[I]n any civil action of which the district courts have original jurisdiction, the
district courts shall have supplemental jurisdiction over all other claims that are
so related to claims in the action within such original jurisdiction that they form
part of the same case or controversy under Article III of the United States
Constitution. Such supplemental jurisdiction shall include claims that involve
the joinder or intervention of additional parties.
Section 1441(a) provides in relevant part:
[A]ny civil action brought in a State court of which the district courts of the
United States have original jurisdiction, may be removed by the defendant or
the defendants, to the district court of the United States for the district and
division embracing the place where such action is pending.
5
State Nat’l Ins. Co. v. Yates, 391 F.3d 577, 579 (5th Cir. 2004).
4
No. 09-31060
they ‘derive from a common nucleus of operative fact.’”6
While § 1367 permits a federal court to regard state claims outside of its
ken, § 1441 allows parties to pull federal cases out of state court. “A [federal]
district court has removal jurisdiction in any case where it has original
jurisdiction.”7 “Original jurisdiction, in non-maritime claims, lies where the
conditions of 28 U.S.C. §§ 1331 [federal question] or 1332 [diversity] are
satisfied.”8 If a plaintiff files suit in state court and asserts a federal cause of
action or sues completely diverse defendants, the defendants might invoke §
1441 to remove the case to federal court.
With the right ingredients, § 1367 and § 1441 can combine to bring into
federal court a state claim originally filed in state court. Indeed, if a plaintiff
files suit in state court alleging both federal and state claims arising out of the
same controversy, the entire action may be removed to federal court.9 Suppose
a young professor asserts that the public university for which she works has
wrongfully denied her tenure. She sues in state court, alleging 42 U.S.C. § 1983
violations alongside state breach of contract claims. The university can remove
6
Mendoza v. Murphy, 532 F.3d 342, 346 (5th Cir. 2008) (quoting United Mine Workers
of Am. v. Gibbs, 383 U.S. 715, 725 (1966)).
7
Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008) (citing 28 U.S.C. § 1441(a)).
8
Avitts v. Amoco Prod. Co., 53 F.3d 690, 693 (5th Cir. 1995). Section 1331 provides:
“The district courts shall have original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States.” Section 1332(a) provides: “The district
courts shall have original jurisdiction of all civil actions where the matter in controversy
exceeds the sum or value of $75,000 . . . and is between – (1) citizens of different States; (2)
citizens of a State and citizens or subjects of a foreign state; (3) citizens of different States and
in which citizens or subjects of a foreign state are additional parties; and (4) a foreign state .
. . as plaintiff and citizens of a State or of different States.”
9
See City of Chicago v. Int’l College of Surgeons, 522 U.S. 156, 164–65 (1997).
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No. 09-31060
the whole case to federal court.10
Although this permitted removal of state and federal claims is
simultaneous, it is useful to view it in steps: first, a party will use § 1441 to
remove the civil action over which federal courts have original jurisdiction; and
second, the party will invoke § 1367 to allow the state claims to piggyback the
federal claims. In our rebuffed professor’s example, the federal question
presented under § 1983 provides the necessary original jurisdiction to remove,
and the common nucleus shared by the federal and state claims allows the
district court to exercise supplemental jurisdiction over the contract claims.
Sections 1367 and 1441 are bound together because the professor filed the
federal and state claims in a single civil action.
Where, as here, the plaintiff files an action in state court with no federal
question or complete diversity, the original jurisdiction necessary for removal
under § 1441 does not exist. Congress specified that federal courts have removal
jurisdiction under § 1441 only if the district court otherwise has “original
jurisdiction” over the “civil action.”11 No federal court had original jurisdiction
over the ANPAC action, and § 1367, by its own terms, cannot fill the void.
Section 1367 grants “supplemental jurisdiction” over state claims, not original
jurisdiction.12 Without original jurisdiction, ANPAC has no jurisdictional hook
for removal. Section 1441(e)(1) in providing removal in the narrow
10
See Whiting v. Univ. of S. Miss., 451 F.3d 339, 342–43 (5th Cir. 2006).
11
See 28 U.S.C. § 1441(a); see also Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 34
(2002) (“Section 1441 requires that a federal court have original jurisdiction over an action in
order for it to be removed from a state court.”); Martin v. Hunter’s Lessee, 14 U.S. (1 Wheat.)
304, 349 (1816) (“The power of removal . . . presupposes an exercise of original jurisdiction to
have attached elsewhere.”).
12
See 28 U.S.C. § 1367(a).
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No. 09-31060
circumstances of that statute which are inapplicable here (single accident with
75 deaths of natural persons) accents this principle.
This is so even if we assume that the district court would have had
supplemental jurisdiction over ANPAC had Halmekangas filed a single lawsuit
in federal court asserting claims against both State Farm and ANPAC.13
Because the state-filed suit could not meet the demands of original jurisdiction,
§ 1441 did not allow for removal. The district court should have remanded to
state court.14
Our holding is both axiomatic15 and in line with the Sixth and Eighth
Circuits. The Sixth has explained:
The supplemental-jurisdiction statute is not a source of original
subject-matter jurisdiction, and a removal petition therefore may
not base subject-matter jurisdiction on the
13
Which we do not decide.
14
See Avitts v. Amoco Prod. Co., 53 F.3d 690, 693 (5th Cir. 1995) (“No federal cause of
action [was] asserted, and it is plain that removal jurisdiction under 28 U.S.C. § 1441 simply
did not exist. The district court had no jurisdiction over the subject matter of the complaint,
and the action should have been immediately remanded to state court.”).
15
See 14B CHARLES A. WRIGHT ET AL., FEDERAL PRACTICE & PROCEDURE § 3722 (4th
ed. 2009) (“It should be noted that a defendant may not base a Section 1441(a) removal on the
supplemental jurisdiction statute, 28 U.S.C.A. § 1367. That is, supplemental jurisdiction
under Section 1367 is not a source of subject-matter jurisdiction for federal question purposes.
Defendants sometimes will assert that a pending federal action that shares a common nucleus
of operative fact with the state lawsuit that defendants seek to remove can furnish an anchor
claim under Section 1367(a), and thus enable removal of a separate suit under Sections 1441(a)
and (b). This is a misreading of Section 1367, which authorizes supplemental jurisdiction over
claims that are within the same civil action as a federal question claim (or over claims that are
within the same civil action as a claim satisfying 28 U.S.C.A. § 1332, the statute conferring
diversity jurisdiction), and those claims alone.” (footnote omitted)); 16 JAMES WM. MOORE ET
AL., MOORE’S FEDERAL PRACTICE ¶ 107.14 (3d ed.) (“The supplemental jurisdiction statute is
not itself a source of original jurisdiction and therefore is not a proper basis for removal.”
(footnotes omitted)).
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No. 09-31060
supplemental-jurisdiction statute, even if the action which a
defendant seeks to remove is related to another action over which
the federal district court already has subject-matter jurisdiction,
and even if removal would be efficient.16
And the Eighth has admonished:
Section 1367(a) does not mention removal at all. . . . While this
statute does allow factually related state law claims to be joined with
the claim over which the federal district court has original
jurisdiction, it plainly does not provide a separate basis for removal
of independent state law actions. . . . [It] is not original jurisdiction
. . . .17
III.
“[E]very federal appellate court has a special obligation to satisfy itself not
only of its own jurisdiction, but also that of the lower courts in a cause under
review . . . .”18 Supplemental jurisdiction on its own does not give federal courts
the power to remove a state case that does not arise from a federal question or
16
Ahearn v. Charter Twp. of Bloomfield, 100 F.3d 451, 456 (6th Cir. 1996) (citations
omitted).
17
Motion Control Corp. v. SICK, Inc., 354 F.3d 702, 705–06 (8th Cir. 2003) (citations
omitted).
18
Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986) (citation and
quotation marks omitted). Contrary to ANPAC’s assertion, Halmekangas urges a
jurisdictional – not procedural or statutory – defect. “[A] procedural defect is any defect that
does not go to the question of whether the case originally could have been brought in federal
district court.” Williams v. AC Spark Plugs Div. of Gen’l Motors Corp., 985 F.2d 783, 787 (5th
Cir. 1993) (citations, quotation marks, and alterations omitted). Where, as here, “there is
improper removal,” we must ask “whether the removed action could have been filed originally
in federal court.” In re 1994 Exxon Chem. Fire, 558 F.3d 378, 395 (5th Cir. 2009). If the
answer is no, then the problem is jurisdictional.
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No. 09-31060
offer complete diversity of citizenship.19 Halmekangas’s action against ANPAC
and Harelson never had federal subject-matter jurisdiction, so – responsive to
our constitutional duty – we VACATE and REMAND to the district court with
instructions to remand to Louisiana’s court.20 Any other outstanding motion is
DENIED as moot.
19
See Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987) (“Only state-court actions
that originally could have been filed in federal court may be removed to federal court by the
defendant. Absent diversity of citizenship, federal-question jurisdiction is required.” (footnote
omitted)).
20
Roark v. Humana, Inc., 307 F.3d 298, 304 (5th Cir. 2002) (“If, before final judgment,
it appears the case was not properly removed because it was not within the federal courts’
original jurisdiction, the district court must remand.”).
9